RSS

The property market remains dormant

10 Jul

President of HCMC Association of Real Estate, Le Hoang Chau forecasts real estate market may need more 5 years to release the huge amount of inventory because we cannot be delusional about the prospect of recovery at the moment.

At the outlook recovery of the real estate market seminar took place on 13/6, many real estate experts were pessimistic about the future of real estate in the next 3-5 years despite the 30,000 billion support package is being banks aggressively launch.

According to Mr. Chau, one of the reasons we cannot be optimistic about the recovery of the market in the short term because the support package solutions were carried out too late. Prime Minister had worked with HCMC authorities on 18/12 last year, but until 15/5 State Bank has had new circulars for 30,000 billion loan package. That’s not to mention the implementation process is still caught many procedures. “The rescue was too slow compared to the urgency of the situation”, the leader of HCMC Association of Real Estate commented.
Having a special concern about bad debt, Cushman & Wakefield CEO (Vietnam), Mr. Chris Brown said that: “Vietnam real estate market is complicated. Domestic investment will not recover quickly if we do not have the timely adjustment of land prices and solve the problem of bad debt thoroughly. “
Chris Brown believed that the bad debt ratio in Vietnam higher than 6% reported and most of them are from the real estate sector. He even said some experts estimated that real estate loans accounted for more than 70% of the bad debt in Vietnam. However, at the present, bad loans and related assets are not public from banks and investors. This is very unbeneficial for the economy and markets. “If banks and investors do not quickly resolve the bad debt, real estate market is unlikely to recover,” the expert emphasized.
Chairman of the Board of Kien A investment services company, Tran Le Khanh predicted: “The market is at the bottom of the U and no one was sure when the wind will change direction. If there are effective support solutions, maybe in the next 3 years real estate will have a chance to recover. “
However, Mr Khanh advised that to clear the inventory, the best way is every investor needs to have their own solution. Enterprises should not rely on the support policy because rescue packages are limited and only for a certain number of objects.
Agree with Chris Brown, Professor Dang Hung Vo admitted: “Real estate cannot recover if loans cannot be definitively solved. Supporting affordable housing segment policies, typically as 30,000 billion package is only one solution to help increase market confidence. “
Mr. Vo pointed out the paradox was existing that the difference between the average income of the people of Vietnam and housing prices is up to 25 times – an excessive number while in most developing countries this ratio is quite low, only 2-4 times higher.
According to Mr. Vo, in fact, the mechanism of preferential credits as well as reviewing new projects for conversion is only done to increase the supply of social housing areas, cheap commercial houses, not reach to the area of real estate inventory. The settlement of the backlog projects has not seen the specific contours.
This expert proposed a total package solution to solve problems for the property market. First, extend the time of the corporate income tax; relax value added tax (VAT) for small and medium enterprises or businesses with large labor content. Second, reduce of land rent in two years 2013-2014 for economic organizations, households and individuals for state land.
The third solution packages targeted to the role of the bank. Consequently, the state-owned commercial banks should set aside a reasonable amount of at least 3% of total loans for the customers to access affordable social housing and commercial housing with low interest rates.
Fourth, we should have a mechanism to encourage businesses and individuals to participate in the development of social housing. In parallel, should promulgate preferential credit policies for people to reach to this product line.
The fifth solution according Mr. Vo, Vietnam should form a new financial institution soon, including Savings and loan association, real estate investment fund, re-mortgage house agency, making the medium and long term capital mobilization channel for real estate market. And the final solution as well as the “heaviest” solution of is reviewing, assessing bad debts, classifying bad debts according to various criteria to have suitable solutions for every situation.
(VNexpress)
 
Leave a comment

Posted by on July 10, 2013 in Container news

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: